Homeowners in England and Wales believe that their properties are worth more than the market price, overestimating the asking price by 6.8%, on average, new research has revealed.
Comparing the price owners believed their property to be worth to what their home actually achieved on the open market, Quick Move Now, which buys property directly from homeowners, also found regional differences in how realistic sellers were about their home’s value.
In Greater London, homeowners tended to undervalue their properties, typically suggesting a price tag of 4.3% below its market value between 2012 and 2016.
In contrast, homeowners in the North East tended to overvalue their properties by the biggest margin – valuing their homes by an average of 19.99% more than its true market value over the same period.
Research, however, suggests that homeowners are getting more clued up when it comes to working out how much their property is worth, with their predictions being increasingly accurate as each year goes by. In 2012, for example, sellers overvalued their homes by 18.07% – almost three times more than the 2016 figure.
Danny Luke, managing director of Quick Move Now, says: “As time has gone on, homeowners have become more realistic about the value of their property, but, as the figures for last year show, with homeowners still overvaluing their property by an average of 6.8%, many still believe their property to be worth considerably more than its true value.
“Looking at the regional breakdown of figures, we can see a great deal of optimism from homeowners across the country. In areas where the property market has performed well in recent years, London, the South East and the East of England, that optimism is not too far off the mark.
“Unfortunately, in areas where the property market has struggled to pick up following the recession, the North East and Wales in particular, property owners appear to be vastly over-optimistic about what their property might be worth.”
|Year||Average amount homeowners over/undervalued their property by|
|2016||Overvalued by 6.80%|
|2015||Overvalued by 9.85%|
|2014||Overvalued by 13.69%|
|2013||Overvalued by 13.93%|
|2012||Overvalued by 18.07%|
|Region||Average amount homeowners over/undervalued their property by (2012-2016)|
|Greater London||Undervalued by 4.30%|
|South East England||Overvalued by 5.32%|
|East of England||Overvalued by 6.06%|
|South West England||Overvalued by 9.81%|
|East Midlands||Overvalued by 10.02%|
|West Midlands||Overvalued by 12.71%|
|Yorkshire and the Humber||Overvalued by 14.77%|
|North West England||Overvalued by 16.87%|
|Wales||Overvalued by 19.42%|
|North East England||Overvalued by 19.99%|